Digitizing the wooden box

The African apps making cents (and sense)

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Innocentia Olisa always knew getting her dream car, a Toyota Venza, would be tough.

But in 2022, she found out just how tough.

She'd been saving in a small wooden box, known as a Kolo in Nigeria.

But when Innocentia broke hers open, she was worried.

Would the money still be there?

Two years earlier, another woman found her kolo raided and her savings missing.

Innocentia found hers intact.

But the crumpled naira notes were still far from what she needed to drive her dream car home.

So she geared up to try again the next year.

The world is full of Innocentias - people who need to save to reach their financial goals.

Some save to buy their dream car.

Some save for a rainy day, like medical emergencies or unplanned job losses.

While others save for the long haul, planning for how they’ll pay their bills when they retire.

Africa is not saving enough

Globally, savings only count if they're in formal systems like bank accounts or pension funds.

Institutions keep accurate records, making it simpler to track and manage your money.

Plus, savings in banks and pension funds can be used for loans and investments, which grows the economy.

But in many African countries, formal financial services are limited.

Over 350 million adults in Africa have never had any form of bank account.

That’s roughly 29% of the population.

This lack of access means Africa's savings rate lags behind the rest of the world.

Only 22% of adults save in Africa, compared to 34% in East Asia and 27% in South Asia.

And the long-term picture is even worse.

Only 19.8% of retired Africans get a pension.

This means that many face poverty when they get old, and rely on younger family members to survive.

When a bank or a pension plan is not on the cards, you do what works.

And for many unbanked or underbanked Africans, a kolo works.

Because across Africa, cash is king.

Nigerians, for example, culturally lean on physical cash as a sign of trust.

In March 2024, the Central Bank of Nigeria tracked $2.58 billion moving within Nigeria’s economy.

And $2.43 billion was physical cash - moving outside banks or mobile money platforms.

And these cash users?

They're tucking away their spare change at home — maybe in a kolo or the United Bank of Under the Mattress.

And when we start talking convenience, a kolo beats a bank account any day:

  • It's a box — so no paperwork or branch visits

  • Your cash is ready whenever your patience wears thin

  • And you can stash as little as a single coin, and no one will turn you away for not meeting a minimum deposit

But saving informally in a kolo can also hold you back.

  • Your money isn't always safe, because someone could swipe the pot

  • It doesn't enter the formal financial system, keeping Africa's domestic savings low

  • And you don’t earn any interest, so what you save is worth less as inflation drives up prices

It's a real letdown for savers with big goals.

But it turns out, we can take the kolo concept and step it up for bigger impact.

Taking African piggy banks online

In December 2015, a Nigerian Twitter user shared how she saved 1,000 naira a day for a year, all in her kolo.

The tweet blew up.

And many users started commenting about jumping on a similar challenge for the new year.

When three friends saw the tweet, they got a different idea.

What if they took the kolo online?

The idea caught fire in their WhatsApp group.

Weeks later, Joshua Chibueze, Odunayo Eweniyi, and Somto Ifezue started what became PiggyVest.

They were West Africa's first online savings platform, breaking down all the walls that keep people from saving in banks.

They made it super easy to open an account.

And they welcomed everyone, no matter the size of their paycheck.

5 million+ customers later, PiggyVest is like a digital, safer version of a wooden saving box:

  • Only you can access or make changes to your account

  • You can save however much you want

  • And you’re free to withdraw anytime without penalties or minimum deposits

In 2022, PiggyVest users withdrew over $519 million (₦400 billion), bringing its total payouts to $1.42 billion (₦1.1 trillion)

Odunayo, the startup’s co-founder and Chief Operating Officer, says this is just a fraction of their deposits.

Most of their customers tuck their money in for longer.

PiggyVest puts these funds into investments that earn interest, like treasury bills and bonds

Going by PiggyVest's numbers, digital saving could boost Africa's domestic savings.

And other African countries are starting to get the hang of it too.

Kenya, for example, has Chumz.

“Chumz” is a Swahili-English slang for money.

The app's getting Kenyans to save as little as 5 shillings ($0.03).

And they're doing it by tapping into Kenya’s mobile money wins.

The Chumz app is linked to M-Pesa, a mobile money platform nearly all Kenyan adults use.

So they monitor your spending on M-Pesa, then reminds you to save based on what you’re spending.

Since its launch, Chumz has pulled more than 100,000 users.

And they've locked away over $3.8 million (500 million KSh) for their customers.

Low income + financial illiteracy held people back - leaving them with wooden boxes to save.

Africa isn’t saving enough - but tech is helping digitize the wooden box and allowing access to saving and investing.

We need more mobile platforms like PiggyVest and Chumz.

We think they’re a smart way to help people meet their financial goals.

And we can grow the economy by getting people to invest for the long haul, even if they're not pulling in big bucks.

Do you think apps can close the gap between Kolo money and financial institutions?

And that's a wrap!

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